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UK Web 2.0 lack of startups

If you’re interested in the Web 2.0 scene in the UK, then you should take a look at Richard MacManus’ post, which gives a good run down of the local UK Web 2.0 scene, discussing some of them in a bit more detail.

I’ve looked at why the local scene is not as active, and offered one or two solutions that might ring true with a few people…

Richard talks about the top UK Web 2.0 apps, with some interesting commentary. What’s surprising is the decided lack of anything really, which makes one wonder why the UK seems to be lagging so far behind.

The UK just doesn’t seem to have the same buzz or momentum going that the US does. I’m not 100% sure of all the reasons, but I’ve got a few ideas, where each one builds on the other:

The community is much smaller.Although there were over 800 people at the Future of Web Apps summit in London earlier this year, there don’t seem to be a proportionate number of people creating apps, products or services, starting new companies or even blogging about doing it.

For the most part, people seem to be either stuck in the service business slant, or working on tech stuff internally – either way it doesn’t look like it’s changing much.

Solution: get involved with the community that is already here.

There’s a stigma associated with failure.I’ve found personally that there is a massive reticence to get off ones posterior and just start something. Of course, I’m single (because I work too much – lesson there?) and I don’t have a family to support or a mortgage to pay, so I completely understand the pressures inherent there. But, I’ve still witnessed people unwilling to take the gamble and jump into the entrepreneur chasm, primarily because people would seem to prefer being unhappy in their current job over failing at doing something really exciting, like changing the world…

Solution: The Chinese don’t have a word for failure, just learning. Consider that.

You can earn more money working for a corporate in the City, or doing media based service work.Let’s face it – the City has something that most people can’t compete with, and that’s pure and unadulterated cash. If you’re looking for a senior developer, he’s either going to already be working for one of the big boys, stuck doing cushy service work, or he’s going to be in the city minting it while working for one of the large behemoths that seem to swallow people whole. Unless you’ve got enough sustainable cashflow coming from a secure pipeline to ensure you can pay someone senior to join you in a start-up, you’re unlikely to entice someone away from the City.

Solution: Can’t really argue this much, but if you’re hiring people based on cash only, then you’re probably looking at the wrong people anyways – try positioning things differently.

The UK market is much smaller than the US.You can’t really compete realistically with a market of potentially 250million people, so when you’re doing your projections and estimates, your numbers are going to be much smaller than they would be in the US for example. Also, if you’re talking to funders, then you’ve got the dual problem of breaking even in a smaller market, as well as trying to get into the US market from the UK. Either way, it’s not the same as if you’re in the US.

Solution: solve small problems in verticals that don’t have solutions, or where there is opportunity, and then solve them globally. Focus on what the US is not doing, rather than what they are. What about Europe!?

Finding funding is not easy.Almost every day I open up my feeds folder, and I read of some start-up or another in the US getting funding, so funders in the US must be in a funding mood. That’s not to say there aren’t folks here in the UK that are interested in Web 2.0, but if they are they certainly aren’t making it well known. I know of several startups here in the UK that have either received, or are receiving calls from US based investors, with the exception of one which received a call from the local 3i office.

Anyways, UK investors seem to have a cynical attitude towards Web 2.0 at the minute, so the cycle repeats itself…

Solution: Bootstrap first! But if you need cash, and you believe in your offering, get in a plane and fly to Stanford or Silicon Valley, and walk down the VC Avenue talking to VC’s about what you’re doing. Until local VC’s get with it that is…

The above isn’t an exhaustive list, but just my take and my frustration with the situation – I’m doing it so I’m certainly aware of the pressures and the potential cost of failure, but I’m sure that there are other issues and factors to consider.

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But my love affair quickly turned sour. Over time, I have experienced various problems with the iPod and iTunes, some of which are listed after the jump.

In another indication of growing interest among VCs in Web 2.0 outfits, Netvibes

has raised US$15 million in a round of financing led by existing backer Index Ventures.

The Paris and London-based start-up, which claims to have recruited five million users of its customisable Ajax home page, plans to use the funding to help it take on rivals such as Microsoft’s Live.com and Pageflakes.

Google is facing its third and probably not its last court appearance this year over click fraud, after the filing of a new class action lawsuit in Pennsylvania.

Samuel Lassoff, the owner of two US websites, has accused the search giant of exposing publishers to click fraud through a breach of contract, negligence, unjust enrichment and unfair business practices.

August 21st 200611:57

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